PM Bolojan: If no commercial solution found, Lukoil's operations in Romania - very difficult to carry out

Prime Minister Ilie Bolojan said on Thursday that if no commercial solution is found, Lukoil's operations in Romania will be very difficult to carry out once the sanctions imposed by the United States government, which also target this Russian oil company, come into force.'We are in a situation where, if no commercial solution is found, Lukoil's operations in Romania will be very difficult to carry out because any company working with Lukoil, if financial flows are not very clearly separated, will risk falling under these sanctions. And think of the major companies that work with Lukoil, think of Romgaz, which is a partner with Lukoil in a project in the Black Sea area, then there are the hundreds of companies that supply various goods to their networks and that would probably be the last option. It is in a certain dynamic, a working group is dealing with these issues, but let us see next week what decisions are made at global level, mainly by the United States, whether this decision will still apply at the end of this month or will be postponed for a certain period of time,' Bolojan told Euronews Romania.The head of the Executive says this issue should not lead to an increase in fuel prices.'We should not face such situations because the refinery, let us say, which Lukoil owns in Romania, is currently shut down so it is not operating and Lukoil's share is significant but not such as to create major problems. In any case, these disruptions, in one form or another, direct or indirect, affect certain markets in the region. There are other countries, such as Bulgaria, where Lukoil's share is much higher, including in the area of the Republic of Moldova, and this was also a topic I discussed today with the Moldovan prime minister, Mr Munteanu,' the head of the Government added.The United States Department of the Treasury announced on 22 October sanctions against the two main Russian oil companies, Rosneft and Lukoil, in response to 'the lack of a serious commitment from Russia regarding a peace process to end the war in Ukraine'.The two companies were already sanctioned by the United States but this time the sanctions have been extended to their subsidiaries and affiliated companies in which they hold a stake of more than 50 percent, directly or indirectly.    The government and the relevant ministries are working on a regulatory act to clarify how international sanctions imposed on the Russian companies Lukoil and Rosneft are to be transposed into national law, but also to limit the potential negative effects on the trading partners of the two energy giants following these sanctions.According to Energy Minister Bogdan Ivan, the final version of this act will most likely be presented at the government meeting next week."Today we will have another round of technical discussions with the US Office of Foreign Assets Control (OFAC) to clarify the details of this regulatory act, so as to limit the negative effects, both on employees and on all suppliers or commercial partners of the two companies under sanctions," Ivan declared on Friday on the sidelines of the conference "The evolution of competition in key sectors under the impact of the energy transition and digitalization".The Energy minister gave assurances that after the act is finalized, it will be explained "in detail"."We are currently getting the regulatory act in line with international legislation, the European Community acquis and the Romanian legislation in order to have a formula as complete as possible. As soon as we finalize it (...) we will come and explain in detail each element related to this. Next week we will have a decision, a regulatory act adopted by the government, and the moment we have its final form, we will present it publicly. Most likely next week at the government meeting," Ivan emphasized.He reiterated that fuel price hikes are not justified and that he requested the Competition Council to look at this issue in order to avoid potential artificial increases due to the sanctions imposed on the Russian company Lukoil. There is no justification for rising fuel prices, as Romania has sufficient supply, unused refinery capacity, and continues to export fuel. "With no sanctions in place yet and normal operations, I've officially asked the Competition Council to intervene and prevent speculative price hikes. Those responsible will be sanctioned," Ivan said.Asked if Romania intends to request an exemption from the sanctions, as Bulgaria did, the minister replied: "Bulgaria depends on the Burgas refinery for over 90% of its fuel supply. That's a different detail. Romania, at this moment, does not depend, in terms of fuel supply, on the refineries under sanctions. We have no intention of doing so. This evening, after the discussion with the US OFAC, we will see exactly how we will apply these sanctions."According to him, so far there are at least three companies that have officially expressed interest in the Lukoil gas station network and the Petrotel refinery."There are companies that have expressed interest only in the gas station network, other companies only for the Petrotel refinery. Now, it is obvious that this is a commercial offer between two private entities that I hope will have a finality," the minister mentioned, specifying that the countries where the companies are based are Romania, the USA, Greece and Hungary.He also said that Lukoil's outstanding debts to the Romanian state amount to hundreds of millions of RON.Reuters wrote on Thursday that American private equity firm Carlyle is exploring options to buy Lukoil's foreign assets. Also, according to sources familiar with the subject, MOL or Hellenic Petroleum would be interested.Last month, the United States and Great Britain imposed sanctions on the largest Russian oil companies - Lukoil and Rosneft, in connection with the Ukraine war. The US Treasury has issued a license giving companies until November 21 to wind down any transactions with Lukoil. The US has moved to block Lukoil's attempt to sell its foreign to Swiss commodity trader Gunvor.